1. McGraw-Hill/Irwin © 2012 The McGraw-Hill Companies, All Rights Reserved Chapter 20: Government Policies Toward the Foreign Exchange Market

2. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-2 Figure 20.1 Intervention to Defend a Fixed Rate: Preventing Depreciation of the Country’s Currency

3. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-3 Figure 20.2 Official Holdings of Reserve Assets, End of Year, 1970-2009 (Billions of U.S. Dollars)

4. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-4 Exports Plus Imports as a Percentage of GDP Figure 20.3 Intervention to Defend a Fixed Rate: Preventing Appreciation of the Country’s Currency

5. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-5 Figure 2.2 The Market for Motorbikes: Demand and Supply Figure 20.4 A Successful Financing of Temporary Deficits and Surpluses at a Fixed Exchange Rate

6. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-6 Figure 20.5 The Best of the Worst: Welfare Losses from Well-Managed Exchange Controls

7. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-7 Figure 20.6 Selected Exchange Rates, 1860-1913

8. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-8 Figure 20.7 Selected Exchange Rates, 1913, 1919-1938 (Monthly)

9. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-9 Figure 20.8 Selected Exchange Rates, 1950-1975 (Monthly)

10. Copyright  2012 by The McGraw-Hill Companies, Inc. All rights reserved. 20-10 Figure 20.9 Exchange-Rate Arrangements, May 1, 2010